Valuation

Business Valuation Multiples in 2026: What Buyers Are Actually Paying

Exit Street

13 Feb 2026 — 1 min read

The business acquisition market in 2026 continues to evolve, with valuation multiples reflecting shifting buyer preferences, interest rate environments, and sector-specific trends. Whether you're buying or selling, understanding current market conditions is essential for successful deal-making.

SaaS & Technology

Software businesses remain highly valued, though multiples have normalized from 2021 peaks. Profitable SaaS companies with strong retention (net revenue retention above 100%) are commanding 4-8x ARR. Earlier-stage or lower-margin businesses typically see 2-4x ARR. The key drivers: predictable recurring revenue, low churn, and demonstrated growth.

E-Commerce & DTC Brands

E-commerce valuations have stabilized after post-pandemic corrections. Profitable brands with diversified traffic sources and strong unit economics are seeing 3-5x EBITDA. Amazon-dependent businesses trade at a discount, while brands with strong owned channels (email, SMS, organic) command premiums.

Service Businesses

Professional services firms—agencies, consulting practices, managed services—typically trade at 2-4x EBITDA for smaller firms, with larger or more specialized practices commanding higher multiples. Key factors include client concentration, recurring revenue, and owner dependency.

Content & Media

Content businesses with diversified revenue streams (advertising, affiliate, subscriptions, products) are valued at 3-5x annual profit. Single-revenue-stream properties trade lower due to platform dependency risks.

What Drives Multiples Up

Strong recurring revenue with low churn
Diversified customer base (no single customer >15%)
Multiple traffic/revenue channels
Documented processes and reduced owner dependency
Growth trajectory with clear expansion opportunities
Quality of earnings with clean financials

What Drives Multiples Down

Platform dependency (single traffic source, Amazon-only)
Customer concentration
Declining trends or market headwinds
Owner-dependent operations
Regulatory or compliance risks
Messy financials or unclear metrics

Key Takeaways

For Buyers: Don't overpay for growth without profitability. Focus on businesses with strong unit economics and clear paths to improvement. The best deals often come from sellers who haven't fully optimized their operations.

For Sellers: Prepare early. The factors that drive higher valuations—clean books, documented processes, diversified revenue—take time to develop. A 12-month preparation period can significantly impact your exit outcome.

Exit Street helps founders and buyers navigate M&A with confidence. Learn more →

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